Earnings Trades update

I added 2 new Earnings trades this week and both will survive to the weekend:

G-III Apparel $GIII  I own a December 85/90/80 Risk Reversal Call Spread

Ambarella $AMBA  I am Short the December 26 weekly $47 Puts and Long stock at $53 (This is a new stock entry earlier today, after the pullback post-Earnings. The initial Earnings stock piece was closed this morning). The Short December 05 weekly $60 Calls will go poof today

Here is a list of the existing:

  • $JCP  The January/December 12w 10/8 Straddle Swap. Options Net still: $2.02 & stock gains: -$.51
  • $DPZ  I am Long stock at $78 (since 10/14) and Short the March $90 Calls (covered calls)
  • $NFLX  I am Short the December $360 Calls (these were adjusted this week) with a Buy Stop still set at $360 (hedge)
  • $FB  The December/December 12w 80/77 Straddle Swap. Options Net still: $.29 & stock gains: $2.75
  • $PANW  This was closed on 12/05 (one remaining piece will expire tonight)
  • $VEEV  I am Short the December 32/26 Strangle (initial: 29/31/26 RRCS — this was adjusted on 11/28 to a Short 32/26 strangle). Options Net still: $1.45 & there is a Long stock piece at $30.60 (this was done as a 1st week rule exception)


-DM 11:45 AM CST


Trading Activity


I will be traveling today so will be light on my trading (for new trades at least). Here is the activity so far today:

Ctrip.com $CTRP
I went Long stock in P/M at $51 (1/4 size, starter position, Submarine Basket) but have seen that hit a Stop already today. I am considering a new trade: a December 53/57/51 Risk Reversal Call Spread

Veeva Systems $VEEV
I have an Earnings trade on. I have already StC the December $29 Calls thus leaving a Short 31/26 Strangle. I have added a Long stock piece at 30.60 now (a hedge) based on this 5m chart:


RCS Capital $RCAP

I have sold the Long stock piece today. This leaves me with the Long December 12.5/10 Put Spread. Options Net: -$.30 & stock gains of $2.313

Skyworks Solutions $SWKS
I have adjusted the short December 05 weekly 65 Calls to the December 26 weekly $66.5 strike. The trade is now a December 05 weekly 63/61 Risk Reversal with Short December 26 weekly 66.5 Calls. Another way to look at the trade: Long Dec 05w/26w 63/66.5 Diagonal Call Calendar with Short Dec 05w 61 Puts. Options Net remains: $.27

StC = Sell to Close
P/M = pre-market


Trading Activity

Most of my efforts this week will be on executing the November Options expiration plan that I blogged about over the weekend.

Some activity today:

$CP  The remaining Option pieces have been closed. Options Net final: $4.77 & stock gains of $1.72

$TMO  I went long stock as it broke the $120 level (120.18) yesterday and sold it all when it hit $124.85 today

$BABA  I made an adjustment to the trade today, see Blog post comment section for specifics

$RCAP  I added a December Collar PS

$ASPS  This position was unwound for me today (Short Puts assigned so stock piece covered, Submarine Basket)

Position Updates

Earnings season continues to wind down so I am shifting more of my focus back to normal Swing trading. I will still do Earnings trades but it will be greatly reduced now that there are a lot less opportunities each week.

Newly added this week that survived to the weekend:

  • RCS Capital $RCAP  I am long stock at $10 (after initially trading it short) as of 11/13 (Swing account)
  • Cyber-Ark Software $CYBR  I am long stock at $37.80 with a December 45/40/35 Collar PS (IRA account)
  • Altisource Portfolio $ASPS  I am short stock at $60 (covers the short November $60 Puts, Submarine Basket)
  • Ford $F  I am long stock at $14 with a December 05w 15.5/15 Collar (Submarine Basket)
  • Sanofi $SNY  I have a December 45/44 Risk Reversal with Short November $47 Calls (these are extra short Calls, Submarine Basket)
  • SPDR S&P Retial Index $XRT I am long the ETF at $90 (Fab 5)
  • Nordstrom $JWN  I am Short the November $75 Calls (2x) and Long the 72.5/70 1×2 Put Ratio. There is a Buy Stop set at $75.01 (2x, hedge). This is a LBW (look both ways) Earnings trade
  • BitAuto $BITA  I am long stock at $79.20 (Earnings trade)

Exits this week (existing or newly added that did not survive to the weekend):

50/50 Basket:  no material changes to report. Just one position still: Regulus $RGLS

Here is the Summary:


Next step for an Earnings trade in Rackspace

Here is my trade for $RAX Earnings:

Long the November 14 weekly 37/35 1×2 Put Ratio
This was done for a $.07 debit
This takes margin (at least until the extra short Puts are closed)

The reaction to the Earnings report was UP so what do I do now? In situations like this – where the directional bet does not work – I will often let the trade ride to expiry (Friday). The cost to participate was low ($.07) so I can just focus on the next trade.

Price could always surprise me and head my way :)